## Facts

- A 79-year-old homeowner was solicited by a mortgage broker employed by a financing company to refinance her home loan.
- The broker represented that the refinance would provide about $29,000 cash at closing and reduce monthly payments to about $1,500.
- At signing, the broker told the homeowner the documents were standard and she need not read them; she signed without reading based on his assurances.
- The written loan terms materially differed, providing about $4,300 cash at closing and increasing monthly payments to about $3,300, leaving her in a worse position than before.
- When the homeowner sought to cancel, the broker allegedly assured her the promised oral terms were the “real” deal and the written terms would not be enforced; she proceeded to close.
- After closing, the written terms were enforced; the homeowner could not afford the payments and vacated the home to avoid foreclosure.
- The financing company received more than $10,000 in fees from the transaction.

## Issues

1. Whether the undisputed record entitled the borrower to summary judgment on a breach of contract theory where promised refinance terms differed from the written terms that were enforced.
2. Whether a mortgage broker and the broker’s employer owed fiduciary duties to the borrower under California law and, if so, whether those duties were breached as a matter of law.
3. Whether the transaction and defendants’ conduct constituted financial elder abuse under California law.
4. Whether defendants were entitled to a continuance under Federal Rule of Civil Procedure 56(f) (now Rule 56(d)) to conduct additional discovery and obtain an affidavit to oppose summary judgment.

## Decision

- The court granted the borrower’s motion for summary judgment on state-law claims for breach of contract, breach of fiduciary duty, and financial elder abuse against the broker and the financing company.
- The court denied defendants’ Rule 56(f) request for a continuance, finding they failed to make the required specific showing that additional discovery was essential to oppose the motion.
- The court treated the material facts as undisputed for purposes of summary judgment and entered judgment on liability in the borrower’s favor on those claims.

## Legal Principles

- Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law; a party seeking Rule 56(f)/56(d) relief must identify specific facts to be obtained and explain why they are essential and currently unavailable.
- Under California law, mortgage brokers may owe fiduciary duties to borrowers in transactions where the broker acts as an intermediary and advisor, requiring honesty, loyalty, and full disclosure, and prohibiting self-interested conduct that harms the client.
- Financial elder abuse may be established where a defendant takes or assists in taking an elder’s property for a wrongful use, by undue influence, or with intent to defraud, including through deceptive inducement in a loan transaction that strips equity for the defendant’s benefit.

## Conclusion

The court held the lender-side broker and brokerage liable on summary judgment where an elderly homeowner was induced to refinance based on promises inconsistent with the written loan terms that were enforced, and it rejected a late, unsupported request to delay judgment for additional discovery.


Zimmer v. Nawabi, 566 F. Supp. 2d 1025 (E.D. Cal. 2008)